Skype Files For IPO

helix2301 writes with news that Skype has filed plans with the SEC for an initial public offering. From TechCrunch: "According to the filing, Skype's revenues for the first six months of 2010 were $406 million, with a net income of only $13 million. But a big portion of that was from interest income. That is only a 3 percent net margin, and this isn't exactly a new business. Its income from operations was only $1.4 million for the six months. However, its gross margins are 51 percent, and have been expanding steadily as the company benefits from the scale of is operations and is able to negotiate lower telephone termination fees around the world."

Re:Good Luck, Skype

[TrisexualPuppy]

Yeah, my brother works for eBay, so he still knows a bunch of people at Skype. They are actually looking forward to the IPO so that they can spend some of the initial capital making some (to use his words) "much needed improvements."

We'll see how this goes!

Financial Analysis

[krem81]

Dear Slashdot (and TechCrunch for that matter), please don't switch to financial analysis just yet. The statement "But a big portion of that was from interest income." is both misleading (why focus on this portion of the financial statement as opposed to the operational part?) and incorrect (net financial result is actually a loss of about $4.3M). Additionally, when you say that "this isn't exactly a new business", that implies that there is lack of growth and the 3% return on revenue is somewhat indicative of future potential, while in the very next sentence you show that there was over 50% growth in revenue.

What they need to do

[Mechanik]

The service is great. I pay $35 for unlimited calling across Canada and the US. It's a no brainer for me. Working from home? No problem, I make all the conference calls I want without tying up the home phone. Need to phone mom long distance? No problem. Working from my girlfriend's place where there's no landline? No problem.

There is the occasional issue. Sometimes (rarely), calls drop. Sometimes (very rarely) there is a number somewhere in the US I can't call. Honestly the biggest problem I have is that my number comes up weird on call display, so there's times when people I'm phoning don't answer because they think I'm some telemarketer, but really that's just my own fault for not shelling out $14 for some Skype credits so they can send an SMS message to my cell phone to confirm that they can use my cell number for call display.

Really their problem is they need to advertise better. When I tell people what I pay for my service, they immediately say "Holy crap that's cheap!" Most people just don't know it's out there, or if they do, they think it's only for Skype-to-Skype calling, and don't know you can call regular phones with it.

It would be nice if they had Skype-In support here (Canada), but really for what I'm paying, I can hardly complain. I easily am recouping in long distance savings what I'm paying out. It is not very hard to rack up $35 in long distance charges in a year otherwise.

Re:Hello world

[Ozymandias_KoK]

He said full version. Dunno about yours, but my Skype only works over Verizon's connection, with WiFi not allowed to be used.

Re:The name Skype

[hhedeshian]

"Hello. Welcome to skype call testing services..."

or something like that. They have no excuse.

Re:What will they do with the money?

[Coopjust]

The SEC filing (part of the summary) states that the money from the offering will be used for "general corporate purposes", but this becomes more interesting when put in perspective of their prospectus, where they want to grow in four areas:

First, we believe that there is a significant opportunity to grow our user base.

Yawn. Most companies are going to claim this. Next!

Second, we believe that we can generate more communications revenue from our users by improving awareness and adoption of our paid products and introducing premium products such as group video calling.

They want to charge for video calling, even though Oovoo and others offer it for free? Good luck, unless you're going to split it into free group calling or do a freemium model (certain group calling features are limited to paid users).

Third, we will continue to develop new monetization models for our large connected user base. We currently generate a small portion of our net revenues through marketing services (such as advertising) and licensing, which we expect will grow as a percentage of our net revenues over time.

They want to make more money off of the people who aren't paying for Skype. I predict more ads and third party ads within the Skype application.

Fourth, we will broaden our user base to include more business users. For example, we have recently released and will continue to develop and market Skype for Business products that aim to capitalize on demand for Skype from small, medium and large businesses.

This is where the money could be useful: scaling up development and investing in new technologies and getting businesses aware. This requires people and time, which takes money. Right now, Skype isn't big in the corporate world from what I've seen, with big warnings from my company not to install it (and heavy filtering on anything Skype related). If they compromise and possibly allow a business client that keeps within the network for anything that isn't a call to an outgoing line (and maybe integrates with the desktop app), I could see Skype getting a major foothold.

Just some observations. I'm not wowed by this IPO either, and the lack of specificity of how they're going to spend the money makes me wonder if they've even gotten that far yet.

Re:Hello world

[grumling]

That's because they did a deal with Verizon for exclusive Skype on Android. The really troubling thing is that there's no determination as to how long this will be.

I have somewhat marginal cell coverage in my home from T-mobile. When using my N900 it is not a big deal thanks to the incredible Skype integration. I just set the "forward when unreachable" call forwarding (**62*) to my Skype-in number and it works like butter. With my Galaxy-S, not only can't I get skype, but it seems that the Verizon version will never let you use WiFi for calling. That makes it worthless for me.

Re:Good Luck, Skype

[maxume]

The Skype founders got their pretty cars when Ebay payed $1 billion for the company.

That's the record Meg Whitman is running for governor of California on.

The beneficiaries of the current IPO will be the private equity group that picked up the pieces from Ebay.

Re:Good Luck, Skype

[Critical Facilities]

The Skype founders got their pretty cars when Ebay payed $1 billion for the company.

Actually, they paid $2.6 Billion [cnn.com]..